The Annulment of Foreign Currency House Loans for the Unfairness of their Core Clauses. A Plea for Unjustified Enrichment as ‘Supplementing Provisions’

This article deals with the consequences of unfair core clauses in housing loans indexed to, or denominated in, a foreign currency, especially the Swiss franc, under Directive 93/13/EEC. It criticises the CJEU’s approach to their annulment and the resulting restitutionary claims of the parties, particularly in Bank M., for subordinating commutative justice and the principle of unjustified enrichment to deterrence and consumer protection. The article argues that unfair exchange-risk and interest clauses should not necessarily entail annulment of the entire loan. Instead, national rules on unjustified enrichment may supplement the contract, preserving the repayment schedule while recalibrating interest by reference to the relevant domestic or foreign money-market rate. The bank’s net profit margin should be forfeited, but borrowers should account for the objective value of capital use. This solution better reconciles consumer protection, private autonomy, and the fundamental principles of European private law.